Sunday, May 11, 2008

Say This in a Dr. Evil Voice

Of course, if that's divided by 50 years, you get $2 billion per year. Considering that nukes generate over 600 billion kWh per year in the United States (last time I checked), the allegedly-unaffordable subsidies amount to ⅓ of a cent per kilowatt-hour.

Authorization of $149.7 million over 3 years for DOE to invest in human resources and infrastructure in the nuclear sciences and engineering fields through fellowships and visiting scientist programs; student training programs; collaborative research with industry, national laboratories, and universities; upgrading and sharing of research reactors; and technical assistance. This program would further subsidize the nuclear industry and entrench nuclear power research within the university system. [Sec. 941 and 944]

Calling the above a nuclear subsidy is a bit like calling student loans to English majors a subsidy of the publishing industry.

Subsidies that aren't exactly nuclear:

Authorization of $250,000 for research and development to use radiation to refine oil [Sec. 1406]

In related news, the existence of windows in government buildings is a solar subsidy.

Protection against being mugged by environmentalists:

Authorization of $2 billion in “risk insurance” to pay the industry for any delays in construction and operation licensing for 6 new reactors, including delays due to the Nuclear Regulatory Commission or litigation. The payments would include interest on loans and the difference between the market price and the contractual price of power [Sec. 638]

In other words, police departments are a subsidy to people who live in high-crime areas.

Protection against being mugged by the rest of the government:

Production tax credits of 1.8-cent for each kilowatt-hour of nuclear-generated electricity from new reactors during the first 8 years of operation for the nuclear industry, costing $5.7 billion in revenue losses to the U.S. Treasury through 2025. Considered one of the most important subsidies by the nuclear industry [Sec.1306]

In an ideal world, the temporary tax credits should be replaced by permanent tax reductions. On the other hand, we can't trust the government to fulfill its side of such a bargain.

Regulation insurance:

Reauthorization of the Price-Anderson Act, extending the industry’s liability cap to cover new nuclear power plants built in the next 20 years [Sec. 602]

As I've said before, you can think of loan guarantees as regulation insurance. If a government stands to lose money (that might be used to buy votes) if it passes preposterous regulations, it has an incentive not to do so. (If any of my readers can figure out a better way to stop regulations before they start, I'd like to know what it is.)

The most important “subsidies” from a free-market point of view are the regulation-insurance and mugging-protection subsidies. I suspect that's what the environmentalists are mainly concerned about.